Jesse Norman MP: Compass' PLAN B shows Labour is still woefully short of credible economic strategy

Jesse Norman is the Member of Parliament for Hereford and South Herefordshire and a member of the Treasury Select Committee

PLAN B, published yesterday by the Compass think-tank, is a good-faith attempt to fill the gaping hole where Labour's economic policy should be.

The authors generously credit me for putting the question they try to answer: Where is the Left on the economy? The first thing to say is that their report is far more thoughtful and constructive than Ed Balls's own five point plan, whose centrepiece is a very risky cut to VAT costing £12.5 billion a year.

Indeed PLAN B, is wildly ambitious, seeking both to pull us out of the present severe slowdown, and to reconstruct the economy on utopian lines. Its 25 authors have assembled an array of their pet hobbyhorses, from state investment banks to workers' councils to more trade union membership. It feels like a farmers' market of Labour homeopathic remedies over the last century.

But the unfortunate result is that its main proposals fall fairly neatly into the unintelligible, the daft and the obvious. Thus the report misunderstands Quantitative Easing, treating it just as a form of state funding, rather than a reversible means to inject liquidity and lower effective interest rates.

It dismisses the shareholder corporation as "past its sell-by date", but also calls for more shareholder powers to control pay—a simple contradiction. It emphasises a Green New Deal and more investment in infrastructure, when the first is already under way and the second clearly in prospect.

So I would say again: Where is the Left on the economy?